Gerresheimer's weight-loss drug deals pipeline helps profits meet forecasts

[July 12, 2024]  By Isabel Demetz

(Reuters) -Medical equipment group Gerresheimer posted second-quarter adjusted core profit in line with expectations on Thursday, driven by the deal pipeline for its plastics and devices business, which supplies weight-loss drug makers with autoinjector pens.

The company confirmed guidance for the mid-term that its deals with weight-loss drug manufacturers, such as Novo Nordisk, are expected to bring at least 350 million euros ($379.44 million) of annual revenue over the next three years, despite lower demand in its primary packaging glass division.

Gerresheimer's results were hit by negative destocking effects, which are expected to remain an issue for the third quarter, CEO Dietmar Siemssen said during a conference call.

"We therefore estimate revenue growth to be around the lower end of our guidance range for 2024," he added.

Siemssen also said the company is set for further growth due to ramp ups in its projects and production lines. The GLP-1 (weight-loss) market is on the rise and it's a similar picture in Gerresheimer, he added.

"We’d expect shares to respond positively on the update given the earnings beat and no change to guidance," Berenberg analysts said.

Gerresheimer shares were up around 2.7% at 1003 GMT.

Vials produced by Gerresheimer are displayed at the annual Drug, Chemical & Associated Technologies Association (DCAT) week in New York City, U.S. March 19, 2024. REUTERS/Patrick Wingrove/File Photo

Adjusted core profit came in at 107.3 million euros in the quarter, slightly above analysts' average forecast of 104.7 million euros compiled by Vara Research, the company said.

The medical technology company also confirmed its earnings guidance for 2024.

($1 = 0.9224 euros)

(Reporting by Isabel Demetz; Editing by Kim Coghill, Rashmi Aich and Jane Merriman)

[© 2024 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.